Some of the challenges DCC pose can be outlined as follows: | Argenta Solutions Fintech

Some of the challenges DCC pose can be outlined as follows:

Certain service provider may charge a markup on top of the DCC transaction cost, which can end up being more expensive for the cardholder.

Like for like comparison may not be as straightforward. The cardholder may not know exactly how much more they are paying when accepting DCC unless they run a quick market rate comparison on the spot, with the exchange rate provided by the merchant vs their bank.

Sometimes the issuing bank will apply a foreign transaction fee even if the transaction is listed in the cardholder local account currency. Those fees can be levied as one-off at the end of the month, making it difficult to reconcile the true cost of a transaction for a cardholder.

On the merchant's side however, DCC is a great source of additional income, which can offset their processing fees as DCC transactions generate some of the highest margins for all parties involved [considering that acquiring can be seen as a commoditised service]. Namely for:

the payment service providers
the acquirer or DCC provider
the merchant .